Two new private-equity related exchange traded funds (ETFs) might launch soon, although poor returns in this sector are the trend at the moment. One of the proposed ETFs is from PowerShares and the other is from Barclays. Both ETFs are based off of the original private-equity ETF, the PowerShares Listed Private Equity Fund (PSP). David Hoffman for Investment News reports that financial advisers and industry experts are not open to the idea of private equity in an ETF, for both tactical and fundamental reasons.

Private equity is affected by the disappearance of cheap credit for finance deals. As with any new ETF performance history isn’t available. So investors may look to PSP for guidance, which is down 7.4% year-to-date. However, private-equity ETFs allow access into an area of the market that was previously unattainable and can create more diversity in a portfolio.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.